Estate Planning

One important aspect of a comprehensive financial plan is Estate Planning. While nobody enjoys thinking of our mortality, it is important to have a plan in place to ensure your hard-earned assets end up in the right hands.

Estate Plan Checklist:

  • Take Inventory and Value All Assets.
    • Houses, cars, collectibles, savings & investment accounts, life insurance policies, health savings, business ownership and other valuable personal possessions.
  • Account for Family Needs.
    1. Life Insurance: to cover lost income, provide for tuition or special needs bills.
    2. Guardian assignment for children in absence of parents.
    3. Document wishes for children’s care in absence of parents.
  • Establish Legal Directives.
    1. Via Will and/or Trust
    2. Medical Care Directive: Living Will (directive for your medical wishes if one becomes unable to make those decisions).
    3. Durable Financial Power of Attorney: Allows someone to act on your behalf legally and financially.
    4. Limited Power of Attorney: A Power of Attorney with imposed limits.
  • Review/Assign Beneficiaries.
    1. On Retirement Plans, Life Insurance Policies, Will, etc.
    2. Update and change if necessary.
    3. Add contingent beneficiaries.
  • Evaluate State & Federal Estate Tax Laws.
    1. For 2021, up to $11.07 million of an estate is exempt from federal taxation. In 2022, up to $12.06 million is exempt. If estate > $12.06 Million, Consider alternatives such as a Grantor Annuity Trust.
    2. Some states have Inheritance Taxes, and some states have Estate Taxes.
  • Determine if you need Professional Help.
    • The larger and more complex estate, the more likely estate planning will require professional help.
  • Plan to Regularly Reassess.
    1. After life changing events (death, divorce, childbirth, etc)
    2. After any changes to tax laws.

Taxes to Plan for…

This is a complicated area of the tax code, so be sure to consult with a qualified professional. Here are a few things to keep in mind:

Estate Taxes.

If you have a large estate, you may owe federal estate tax when you die. In 2022, the federal estate tax generally applies when a person’s assets exceed $12.06 million at the time of death. The estate tax rate can be up to 40%. Also, some states have their own estate taxes (and set their own estate size thresholds), so there could be two estate tax bills to pay: one to the federal government and one to the state.

Inheritance Taxes.

Some states have inheritance taxes, which are different from estate tax. The people who inherit the money pay the tax.

  • Only six states actually impose this tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. In 2021, Iowa passed a bill to begin phasing out its state inheritance tax, eliminating it completely for deaths occurring after January 1, 2025.
  • The deceased’s spouse is typically exempt, meaning money and items that go to them aren’t subject to inheritance tax. Children of the deceased are also sometimes exempt.

Income Taxes.

The assets in a trust might generate income, which could trigger income taxes or capital gains taxes. Who pays that tax depends on who legally owns the assets. If a charity gets the income directly, that donation might qualify for a tax deduction.

If you would like to create or revisit your existing Estate Plan, we would be happy to assist you in the process. Reach out to us at



This material is for informational purposes only and is not investment, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Triad Advisors, LLC does not provide tax or legal advice.